CASH HAEMORRHAGE

Published on 02/09/2009

Uncategorized

CASH HAEMORRHAGE

Dominic Smith, marketing director, Cerillion Technologies

REVENUE ASSURANCE, THE INTEGRATION CHALLENGE

Over the last four or five years, revenue assurance has become one of the most fashionable topics in the telecoms industry. In recent months its popularity as a discussion point has been enhanced still further by the global economic downturn.

The burgeoning interest in the subject has attracted a new wave of companies offering revenue assurance products, solutions and services and with it the ecosystem of conferences and general industry hype that you might expect.

Strategic armoury

Revenue assurance is now rightly seen by communications services providers (CSPs) as a key part of their strategic armoury. By reducing revenue loss, revenue assurance enhances profitability and enables better

use of existing network and system resources, improving return on investment (RoI), and often reducing capital expenditure.

A recent industry survey identified revenue assurance as one of the three most critical business issues facing CSPs today, with 15% of respondents highlighting it as their most urgent concern.

For mobile operators, eliminating revenue leakage should be a particularly urgent consideration. After all, research indicates that they tend to lose more money than other telecoms service providers. A recent Analysys Mason report commissioned by Subex Azure, showed mobile operators worldwide suffered an average implied revenue loss of around 13%. And according to Subex, global mobile operators are losing an estimated $77 billion through avoidable revenue leakage.

A key cause of revenue leakage is poor systems integration. This is a characteristic of the traditional best of breed approach to the implementation of business support systems. With this model, systems integrators are tasked with implementing and integrating multiple heterogeneous systems to build a complete solution. Invariably, they encounter two key problems which make this difficult to achieve.

First, they typically discover incompatibilities between the data models used. Synchronising data across applications is complicated because of the need to align different ways of identifying the subscriber, service and orders. However, if mappings are not carried out properly, the mobile operator will struggle to trace orders across systems. Providing such traceability has a cost in terms of introducing data replication and unnecessary levels of complexity, which can result in holes where revenue leakage can occur.

Process concerns

Poor integration typically also results in a host of process problems. It may, for example, lead to data entry in multiple systems or incompatible configuration between solution components. This may result in rating and prepaid charging errors, essentially applying an incorrect price to a customer record or not being able to price the record at all, leading to usage that cannot be billed for, and ultimately revenue leakage.

Incomplete or incorrect usage data is another primary cause of leakage. This problem often occurs when network switches produce erroneous information and prevents the mobile operator identifying the type of service used by a customer or the customer using that service. In either case, the result is an inability to bill for usage incurred.

Poorly integrated systems can also lead to delays in billing. Sometimes manual set up processes for new services result in several days hold up before customer invoicing can begin, leading to revenue loss. In contrast, a fully automated process with flow through provisioning enables the mobile operator to begin billing immediately.

Invoicing system errors are another potential cause of revenue leakage. Historically, the problem has been thought to be one of under-billing: operators failing to invoice customers for services received. In fact, over billing can be just as significant. This typically occurs when a service is terminated but the operator continues to bill for it in error.

Tackling root causes

Putting additional systems and checks in place is largely a reactive approach to revenue assurance. Rather than dealing with problems at source, it focuses on implementing processes that then track where revenues are being lost and then look to correct errors retrospectively.

As a result, problems can stay hidden for long periods. Mobile operators may initially believe that they have billing issues or are suffering from credit management problems. In fact, when they carry out root cause analysis, they often discover that their problem is order management related.

If the system is not proactively managed, a mistake in this initial order process may not be discovered by the operator for some time. In contrast, the best end to end pre-integrated solution suites give operators the confidence that all elements within the product suite will work together in harmony. The holistic approach of these systems is in line with operators’ desire to address and monitor the whole lifecycle from initial order placement through to billing and cash collection.

Preventing gaps

These solutions also enable mobile operators to be much more proactive. Rather than merely reacting to problems that have already happened, their seamless connectivity offers a means to prevent gaps in the system appearing in the first place.

The pre-integrated nature of these systems allows key business information to be proactively tracked, detailed reports to be generated for each process, revenue leakages quickly identified and losses minimised. It is hardly surprising, therefore, that ever greater numbers of mobile operators see end to end, pre-integrated solution suites as a vital weapon in their ongoing battle to achieve genuine revenue assurance.